The Reserve Bank of India Explores Tech Solution for CBDC Privacy Concerns
The Reserve Bank of India (RBI) is actively working on addressing privacy concerns related to the central bank digital currency (CBDC). According to an insider familiar with the government’s CBDC progress, the RBI is focused on improving privacy issues associated with the digital rupee. The source mentioned that while a privacy legislation is one approach, the RBI is also exploring technological solutions to tackle this problem. Additionally, it was revealed that local startups may participate in India’s CBDC pilot in the future. The official emphasized that developing a secure CBDC for the nation requires experimentation and considerable effort.
India Budget 2024 Does Not Modify Crypto Tax Policy
India’s recent budget session did not introduce any changes to the existing crypto tax deducted at source (TDS) policy. The country has previously implemented a 30% tax on crypto profits and a 1% TDS on all transactions, impacting local crypto service providers and investors. Despite calls to reduce crypto taxes, Finance Minister Nirmala Sitharaman confirmed that there were no changes to taxes on digital currencies. Sathvik Vishwanath, CEO of Unocoin, expressed that the campaign to reduce crypto tax will continue until fair taxation is achieved. Rajagopal Menon, VP of WazirX, believes that integrating provisions for long-term financing of domestic crypto projects can benefit India’s digital public infrastructure.
Hot Take: Reserve Bank of India Advances CBDC Efforts
The Reserve Bank of India is making significant progress in its efforts to develop a central bank digital currency (CBDC). The RBI is actively exploring technological solutions to address privacy concerns associated with the digital rupee. While a privacy legislation is one approach, the central bank believes that other technological options exist. India’s CBDC pilot may also involve the participation of local startups in the future. It is important to note that the RBI does not have jurisdiction over crypto taxation, as it falls under the responsibility of the government. Overall, the development of a secure CBDC for the nation requires experimentation and substantial effort.
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